Reddit Inc (NYSE:RDDT) shares rose about 4% on Friday to $175 following an expanded integration with Shopify, a move welcomed by Jefferies analysts who highlighted the partnership as a potential driver of lower-funnel advertising growth and broader advertiser adoption.
The company announced that its Shopify integration has moved from a test phase to general availability, enabling merchants on Shopify to connect their storefronts directly to Reddit’s advertising platform.
The integration is designed to reduce onboarding friction for advertisers by automating catalog uploads and pixel setup, allowing for faster deployment of Reddit’s Dynamic Product Ads (DPAs).
Once connected, Shopify merchants can sync product catalogs, including pricing, imagery, descriptions, and inventory data, in real time with Reddit’s ad ecosystem. This enables ongoing updates to shopping campaigns without manual adjustments, streamlining campaign management for advertisers.
Jefferies noted that the expanded integration could support Reddit’s efforts to grow its lower-funnel advertising business and deepen penetration among small and mid-sized businesses.
The firm highlighted that Shopify powers millions of merchants globally, while Reddit currently has tens of thousands of active advertisers, suggesting a sizable opportunity to expand the advertiser base. Jefferies maintained a Buy rating on the stock.
The analysts also pointed to potential geographic benefits, noting that nearly 60% of Shopify merchants are located outside the United States. This could help broaden Reddit’s international advertising footprint, which remains a relatively small portion of the company’s overall revenue base.
Reddit’s Dynamic Product Ads, which use contextual signals to match products with high-intent users, have been a key focus of the company’s lower-funnel strategy. The format launched in beta in 2024 and expanded broadly in 2025. Jefferies said continued development of these performance-oriented tools has contributed to strong growth in conversion-driven advertising revenue.
The analysts also referenced internal performance data and third-party research from TransUnion, which found that Reddit delivers more than twice the incremental return on ad spend compared with average media plans in North America, and ranks as a leading paid social channel for efficiency in EMEA.
According to Jefferies, strong advertiser performance is supporting faster adoption among new advertisers and increased spending from existing clients. The firm added that Reddit’s advertiser count has grown roughly 75% year-over-year in the first quarter, underscoring continued momentum in its advertising business.